Question
The following standards have been established for a raw material used in the production of product C10: Standard quantity of the material per unit of
The following standards have been established for a raw material used in the production of product C10:
Standard quantity of the material per unit of output
2.4 liters
Standard price of the material
$17.00 per liter
The following data pertain to a recent month's operations:
Actual material purchased
5,600 liters
Actual cost of material purchased
$99,400
Actual material used in production
4,885 liters
Actual output
2,030 units of product C10
Calculate:
A. The material price variance
B. The material quantity variance
C. Who is most likely responsible for the price variance?
Explain why.
D. Which of the variances in this situation should be given the greater attention? Circle the correct response.
Price Variance Quantity Variance
Explain why you made the choice that you did.
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